In this week's Stansberry Investor Hour, Dan welcomes Jonathan Rose to the show. Jonathan is the editor of Masters in Trading at our corporate affiliate InvestorPlace. He has a presentation where he's showing how he's tracking 20 stocks that have strong, unusual market bets right now. You can view this presentation here.

Jonathan kicks things off by sharing how his livestream show operates and how his Discord community has become a resource for newcomers. He then gives his trading background by explaining how he made 1,000 trades a day for the Chicago Mercantile Exchange and how that launched his career. He also mentions what's new on the market floor due to technology changing the way we invest. Jonathan next states what he looks for in his trades. He says the best traders should be able to explain why they're making a particular trade. For him, valuation is one of the things he looks for. And he likes to search for groups of five stocks that can rise together even if one is lagging...

I can't tell the future. I just look at valuation. I want to see something that's happening and I want to see another highly correlated product that's just dragging along. It's like a family of five stocks that always move together. I want to find that family of five stocks that's up 20% except one of them forgot, so it's like, "Wait! Wait for me!" But there always needs to be a reason for a trade.

Next, Jonathan discusses owning multiple ideas and having "relative trading" between stocks. He also believes that stocks aren't "expensive" or "inexpensive" in isolation – rather, they can be high or low, correlating to similar stocks. One of the things that Jonathan does when looking for new trades is following "unusual options activity" set by the biggest traders. It suggests that they know something about companies that most folks don't, and paying attention tends to pay off. And Jonathan cautions against making too many trades...

I like to share fixed-risk managed trades because if I start sharing the short side of trades and the market moves too much, then I'm going to be up [while my Discord community is down]... So I can't just share trades and share trades and share trades. What we do in the portfolio is share trades, and when a portfolio has enough risk, we don't share a trade. My concern is... everybody trades too much and everybody trades too big... Take it slow. Education mitigates risk. There's no harm in learning... Understand what's going on.

Finally, Jonathan advises treating trading like any other business and earn the right to buy more shares or place bigger trades. If you track your portfolio's performance and see that it's strong, it's fine to add risk. But if your portfolio is pulling back, you should be controlling your risk instead. Jonathan then shares four tickers and will explain why he's looking at them in his upcoming presentation. And he wants investors to understand that everything in the financial world is a derivative of something else and that you should find a way to express your opinion in whichever area you choose to invest in...

Everything [in the market] is just a derivative of something else. Options are just a derivative of stock. [Commodity] companies... are just a derivative of the cash price of [the commodity]. So, we use these different markets, whether they're stocks, whether they're ETFs, whether they're mutual funds, or closed-end mutual funds or open-end mutual funds. They're just a way to express an opinion... If I think gold's going higher, I'm really good at evaluating the different ways of expressing that and finding really great risk/reward for the people that follow me.

Click on the image below to watch the video interview with Jonathan right now. For the audio version, click "Listen" above.

(Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Jonathan Rose is a veteran trader and educator with more than two decades of experience navigating the fast-paced world of professional trading. He began his career in 1997 on the floor of the Chicago Mercantile Exchange, managing Nasdaq and S&P 500 futures during the height of the dot-com boom. And by 2003, he became the director of trading at a top proprietary trading firm, where he managed a team of traders and oversaw complex risk strategies.

In 2015, Jonathan launched Masters in Trading with a mission to bring Wall Street-level tools and techniques to everyday investors. His divergence-based trading strategy – which focuses on identifying price dislocations across correlated assets – has helped thousands of students spot high-probability trades and sharpen their edge in the market. His recent track record includes numerous short-term winners, including gains of 700% in 16 days, 245.13% in 25 days, and 183.78% in 14 days.